Service Stacking Shows Consumers Not Yet Suffering from Service Fatigue

Entertainment Consumer Research Analysis and Commentary

More than half of all SVoD users who subscribe to three or more services will purchase additional services this year, according to Futuresource’s recent Living with Digital consumer research report.

“We’re seeing continued momentum behind SVoD service uptake, with consumer appeal strengthening and sustained adoption of Netflix and Amazon Prime,” says David Sidebottom, Principal Analyst at Futuresource Consulting. “This is being bolstered by a wider trend for multiple SVoD services, also known as service stacking, which is becoming commonplace across many countries worldwide. In the USA, more than 80% of SVoD households are stacking at least two services.”

Disney+ is also helping to drive this uptake, although Futuresource research suggests the intention to subscribe is lower in European countries ahead of launch than it was in the USA. However, the inclusion of Frozen II and the potential unexpected uplift from coronavirus could see the Disney+ launch boost service stacking in Europe more than previously anticipated.

The research also shows that those consumers who service stack are also much more likely to show strong positive behaviours relating to wider digital video consumption. For example, consumers with three or more SVoD services are twice as likely to subscribe to another SVoD service within the next year than those who currently only subscribe to one service. They are also much more likely to spend at least 10 hours per week watching Netflix, as well as more likely to want to build a digital movie collection of sell-through titles.

“With attention-grabbing launches from the likes of Disney+, our research points to a future where subscriptions and consumer spend are pushed to new heights,” says Sidebottom. “In addition to the strong intent to sign up to new services in 2020, approximately 70% of SVoD subscribers say they will keep subscribing to their SVoD services without cancelling in 2020, providing a strong bedrock for sector growth. However, in leading markets, churn on Netflix has increased in 2019 compared to 2017, now around one-third of Netflix subscribers say they have dipped in and out of Netflix over a 12-month period. This highlights the continued importance of churn management in an increasingly competitive industry.”

Futuresource Consulting’s latest Living With Digital report is based on more than 12,000 consumer interviews carried out with nationally representative samples. Surveys were conducted in the USA, UK, Germany, France, Italy and Spain in December 2019 and has been running for nearly ten years. For more information on this report, please contact Leon Morris via leon.morris@futuresource-hq.com

About the author

David Sidebottom

David is a Principal Analyst – Media and Entertainment. David has over 20 years’ experience in a research and consultancy environment and is closely involved in researching, analysing and consulting on key content industry and consumer technology developments worldwide, with a particular focus on the evolution of digital business models in the TV, video and music industry. David works with a wide variety of high profile Futuresource clients across the content ecosystem including studios, broadcasters, technology companies, hardware vendors, service providers and industry associations. He also directs Futuresource’s long-running global consumer panel ‘Living with Digital’.